Reward management is a practice that has been used for some time in the management of human talent. Regarded as a key differentiator for attracting talent today it goes beyond that purpose, as human capital managers have found it useful to foster a culture of high performance among employees.
One of the current challenges of organizations is precisely not to focus their compensation programs and incentives to benefit only the company. Employees want to be successful and grow in a competitive environment, for which the company must establish a philosophy of compensation and incentives that encourage employees to give their best effort and, at the same time, benefit the organization by having employees who are achieving the business’ goals.
There is a wide range of options to design a plan of compensation and benefits, and it is important for it to be aligned with the overall strategy of the company and for it to be part of a comprehensive process of human capital management by connecting with other processes such as recruitment, performance appraisals, and career plans, among others.
Here are a few tips to successfully implement a plan of compensation and benefits for your employees:
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Align compensations to the strategy of the organization
When designing the compensation plan for your employees it is important that you do it based on the organizational strategy, as this will help the performance of your collaborators to relevantly impact in achieving organizational goals. There is a clear need to consider compensation as a process that has a great impact on the achievement of expected results consistently over time, promoting the culture of high performance and achievement of objectives by bringing employees to give their best effort and perform their duties excellently. Therefore, a properly designed compensation system can become the backbone of any organization.
In other words, it is important to recognize that management compensation must be flexible in time, since the success of this strategy has its foundation in the synchrony that exists between it and the culture and values in the company, which are dynamic and constantly evolving.
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Rank and classify the jobs of the company and define job profiles.
It is essential that each of the positions that make up your organization is well defined, as this is the basis on which the compensation plan and benefits is supported, so you’ll sure to be implementing a fair practice for each of your collaborators. The job profile is a document in which all information regarding a position is included, such as skills, competencies, attitudes, educational and vocational training, experience, among others. It is essential that recruitment and selection is based on profiles made as to ensure you’re hiring people who meet the requirements and that their profile is suited to the values and culture of the organization.
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Make a formal performance evaluation process
As we have mentioned before, the process of performance evaluation is one of the most valuable tools that are available to the company in order to estimate the performance of employees. By having a formal system of evaluation and feedback, your team of human talent will be able to identify employees that meet or even exceed the expectations and goals that were established and those that do not. The information obtained from these reviews is invaluable for making decisions regarding salary increases, compensation and performance-based incentives, which should ideally be founded in evaluating job performance. Organizations who integrate this practice in their philosophy and action plans are able to enhance the skills and competencies of human talent, getting them to develop within the company, which is a benefit for both parties as the collaborators are motivated to be more productive and a commitment to the company occurs, as the organization achieves its goals and becomes more competitive.
Image courtesy of Robin Hutton at Flickr.com
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Make a graph of distribution of performance (ranking) of your human talent
The performance evaluation is a systematic rating of how each employee is doing his job, as well as the potential for future development. Many companies use the bell curve, which is intended to be a snapshot of the distribution of a team’s performance. Said curve represents the trend in the entire team to work towards poor, average or superior performance.
It is important to note that each company must establish criteria and allowable ranges to locate their staff in any of these categories of the talent curve, according to the parameters used in the performance evaluation.
The compensation strategy has a great influence on the performance of your human talent. An efficient plan is a great support for the other processes of human capital and it helps attract key talent to the organization and retain them. Not only will this generate competitive advantage in the labor market but internally in your organization, by having a team that is motivated and ready to give their best to reach their potential while living the experience of being successful and recognized, which will be reflected in a more productive and profitable company.